Carrington Ex Rel. Nathan v. St. Paul Fire & Marine Insurance

473 N.W.2d 591, 164 Wis. 2d 148, 1991 Wisc. App. LEXIS 1097

• Court: Court of Appeals of Wisconsin
• Decided: July 30, 1991
• Docket: 90-0834
• Status: Published

Opinions

SULLIVAN, J.

This case involves the construction of an insurance contract and the coverage afforded under the uninsured motorist (UM) clause contained in a policy issued to a youth home.¹ There are no material facts in question. The issues present a question of law which we review de novo. Martin v. Milwaukee Mut. Ins. Co., 146 Wis. 2d 759, 766, 433 N.W.2d 1, 3 (1988).

The undisputed facts involve a car accident. On the day of the collision, the appellants, Cameron J. Car-rington and Dorthea Evans (collectively, the children), both minors, resided at Sunburst Youth Homes, Inc. (Sunburst) under orders extending dispositional orders of the juvenile court. These orders determined that Car-rington and Evans were children in need of protection and services (CHIPS), and placed their custody with the department of social services of their respective counties of residence.² They were on an outing with a Sunburst employee, Wesley Jarrell, and another adult, Lori Jarrell. Both children sustained injuries when, as passengers in a Sunburst-owned 1986 Dodge Omni, they were struck by an uninsured vehicle which allegedly crossed the center line of the highway. St. Paul Fire & Marine Insurance Company (St. Paul) had issued a commercial fleet policy to Sunburst, including coverage for the occupied vehicle.

Evans appeals from a summary judgment granted to St. Paul which declared, inter alia, that its UM provision afforded occupancy coverage only, and which also dismissed her complaint.³ Carrington appeals the same judgment.

The trial court determined that Evans and Car-rington were not named insureds, but occupancy insureds. Applying the single-limit provision,⁴ the court limited all injured parties' recovery to a total of $100,000. The consequence of finding the children to be occupancy insureds and applying the single-limit provision is that it precludes stacking the UM coverage of the other vehicles owned by Sunburst and insured by St. Paul.

Single limit. If a single limit is shown, it is the most we'll pay for all damages resulting from bodily injury caused by any one accident. This limit applies no matter how many covered autos or protected persons are involved or how many claims are made.

This case presents two issues. First, does a UM provision of a commercial fleet policy issued to a corporate insured include two minors who had been placed by juvenile courts at a corporate insured facility under CHIPS dispositional orders as named insureds.⁵ Second, if the children were named insureds, does the single limit UM policy coverage of $100,000 preclude the stacking of the coverages of multiple insured vehicles, regardless of the number of insured vehicles and the number of protected persons or the number of claims filed, and whether the single-limit language of the policy violates sec. 631.43(1), Stats.

I.

The resolution of whether the children may stack the UM coverage of the noninvolved vehicles is dependent upon first, their status under the insurance policy. The children can either be "occupancy insureds,"⁶ i.e., individuals having insurance coverage merely because they were occupants of the insured vehicle struck by an uninsured motorist, or they can be "named insureds." As occupancy insureds, they cannot stack the UM coverage of the noninvolved vehicles. If they are also named insureds, they may stack the insurance coverage.⁷

In answering the question of whether the children were named insureds under Sunburst's fleet policy, St. Paul argues that because the policy was issued to Sunburst, its unambiguous language defining protected persons could not apply to the children. The policy, in part, provides:

Who Is Protected Under This Agreement

Protected persons are people and organizations protected under this agreement. Each is protected separately. However, the limits of coverage shown in the Coverage Summary are shared by all protected persons.

Here's a list of "protected persons" and certain limitations on their liability protection.

•You.

•A member of your family.

A member of your family is a person who is related to you by blood, marriage or adoption and lives in your home. A ward or foster child who lives with you is also considered to be a member of your family.

•Anyone else in a covered auto. Anyone else while in a covered auto or a temporary substitute auto is protected.

The children are occupancy insureds at the very least because they were passengers in the insured vehicle. However, St. Paul contends that because Sunburst is an inanimate and bloodless corporate entity, it could not have a family of which any children could be members, nor does it have a home where children, as wards or foster children, could live. Because no "family" exists, St. Paul argues that the children's recovery is limited to their status as occupants and not amenable to stacking. In Martin, 146 Wis. 2d at 766, 433 N.W.2d at 3, the supreme court determined that passengers, occupancy insureds who were not named insureds, were not covered by insurance on a noninvolved vehicle. St. Paul contends that the policy's failure to name any insured other than the Sunburst corporate entity eliminates the children as named insureds. See, e.g., American Fire and Casualty Co. v. Sinz, 487 So. 2d 340, 340-41 (Fla. Dist. Ct. App. 1986).

The children contend that they are named insureds, and hence, covered by approximately eighteen nonin-volved vehicles named in St. Paul's fleet policy.⁸ They reason that the term "protected person" includes "You," which the policy defines as:

The words you, your and yours mean the insured named here:

Sunburst Inc. of Wisconsin

Sunburst Youth Homes, Inc.

Sunburst Care Facilities, Ltd.

Sunburst Foundation, Inc.

Neillsville, WI 54456

Which is a:

x corporation — individual

— partnership — joint venture

— other — condominium

Their reasoning posits that Sunburst is named as a protected person, or insured, and that protected persons include "[a] ward or foster child who lives with you" as a member of "your family." Because -the juvenile court placed the children with Sunburst, a group home, they assert that they qualify under St. Paul's policy as named insured wards or foster children. If the children are named insureds, they may stack UM coverage provided to all noninvolved vehicles. As persons operating a home which receives children under court order, Sunburst's owners could reasonably expect that such children would benefit from coverage as named insureds. We agree.

A.G. v. Travelers Insurance Co., 112 Wis. 2d 18, 24, 331 N.W.2d 643, 646 (Ct. App. 1983), determined that a one-year, juvenile court placement of a child in a family foster home⁹ upon a delinquency finding qualified the child as a "resident" of the household for insurance purposes. In A.G., we limited the scope of our holding in the following language:

We hasten to add that we expressly are not deciding whether foster homes owned by the state or a county agency fall within the ambit of this case; nor are we deciding whether group homes are of the same genre.

Id. at 25, 331 N.W.2d at 647.

There are certain practical considerations to warrant a consistency in determining that a foster child, placed by a county agency or court in a facility other than a family foster home, is a "member of the family" for insurance purposes of that facility. After a court finds that a child is in need of protection or services, it is faced with the consideration of numerous placement alternatives. Among other things, the court may consider placing the child in the home of a relative, an unlicensed foster home, a licensed foster home, a group home, or a residential treatment center. See secs. 48.345, 48.34(3), Stats.

In determining the type of placement that would be in the best interest of the child, an unnecessary burden would be placed upon the courts and child welfare agencies if there was an inconsistency whereby a child, as a matter of law, would be held to be a member of the family for insurance purposes while a resident of a foster home, but not at a group home; or at a group home or a foster home, but not at a residential care facility.

We now determine that the rationale of A.G. should be extended to include as named, insureds, for UM stacking purposes, CHIPS children placed by court order into a corporate home to which the UM policy is issued. Evans and Carrington, as court-placed children in a group home,¹⁰ are therefore named insureds under a fleet liability policy issued to Sunburst, the corporate home.

II.

Since we have determined that Evans and Car-rington are named insureds, the second issue is whether St. Paul's $100,000 single-limit policy provision¹¹ precludes stacking and whether the single-limit language of the policy violates sec. 631.43(1), Stats. The statute provides in part:

Other insurance provisions. (1) General. When 2 or more policies promise to indemnify an insured against the same loss, no "other insurance" provisions of the policy may reduce the aggregate protection of the insured below the lesser of the actual insured loss suffered by the insured or the total indemnification promised by the policies if there were no "other insurance" provisions.

St. Paul argues that even if the children are named insureds, their recovery is limited to the unambiguous single-limit language of the policy. The children argue that sec. 631.43(1) bars exclusion of other insurance to reduce the aggregate pool of money available for coverage.

In Hulsey v. American Family Mut. Ins. Co., 142 Wis. 2d 639, 419 N.W.2d 288 (Ct. App. 1987), Jill Hul-sey, who was a resident in her father's home, was injured while riding as a passenger on a friend's motorcycle. The friend had no liability insurance. The court of appeals permitted the daughter to recover UM benefits under her father's policy in addition to recovering under her own UM policy provision. Id. at 648-49, 419 N.W.2d at 292. The court determined that sec. 631.43(1), Stats., mandates indemnity insurance for named insureds injured by uninsured drivers and moreover, prohibits reduction of aggregate protection.

St. Paul contends that the express terms of the fleet policy limit recovery for all vehicles to $100,000 and consequently precludes stacking. St. Paul also seeks the umbrage of sec. 632.32(4), Stats., which mandates minimum insurance in "every policy" which insures "any motor vehicle." It argues that this statute does not mandate UM coverage for each listed vehicle contained within one policy document. In short, because the policy language limits total coverage to $100,000, recovery is limited to that amount, regardless of how many vehicles are listed. St. Paul asserts that the effect of this language, as well as Sunburst's corporate status, limits coverage to a total of $100,000 caused by the accident.

In relying on Hulsey, the children assert that St. Paul's listing of the individual vehicles and the assessment of separate premiums for each, although contained in one policy document, is in effect a policy for each vehicle. See Burns v. Milwaukee Mut. Ins. Co., 121 Wis. 2d 574, 578, 360 N.W.2d 61, 63-64 (Ct. App. 1984). Because sec. 632.32(4)(a), Stats.,¹² mandates UM coverage in each policy, they may recover under each. "When the insured pays two premiums, he or she obtains two protections regardless of whether the coverage is provided in one policy or two policies." Mills v. Wisconsin Mut. Ins. Co., 145 Wis. 2d 472, 483, 427 N.W.2d 397, 402 (Ct. App. 1988).

We agree that a fleet policy which lists the individual vehicles and assesses a separate premium for each, regardless of whether this information is contained in one or several policies, is in effect a separate policy for each vehicle. See Burns, 121 Wis. 2d at 578, 360 N.W.2d at 63-64. This fleet policy, which limits recovery for each accident to $100,000, violates sec. 631.43(1), Stats. As set forth in Hulsey:

In Wisconsin, however, there is an exception to this rule regarding indemnity insurance in the form of uninsured motor vehicle coverage. The legislature has promulgated sec. 632.32(4)(a), Stats., which mandates uninsured motor vehicle coverage in every automobile policy. Of equal importance, the legislature has enacted sec. 631.43, Stats., prohibiting insurers from circumscribing the aggregation of uninsured motorist benefits. Welch [v. State Farm Mut. Auto. Ins. Co.], 122 Wis. 2d at 177, 361 N.W.2d at 683 [1985].

Thus, in Wisconsin, exclusionary clauses that may otherwise be valid in limiting the aggregation of benefits in multiple policies, or within the same policy, are not valid when attempting to limit uninsured motorist coverage. Nicholson v. Home Ins. Co., 137 Wis. 2d 581, 594, 405 N.W.2d 327, 332 (1987). It is a prohibited practice in Wisconsin for an insurer to deny, by policy limitation, the personal and portable nature of the indemnity insurance known as uninsured motorist protection. See Welch, [122 Wis. 2d] at 179, 361 N.W.2d at 684. The personal and portable nature of uninsured motorist protection is allowed by law to exist. This means that an insured may "carry" this particular part of the insurance policy and place it on top of other insurance policies providing similar coverage, even though prohibiting clauses exist regarding the rest of a policy. Cf. id. at 180-81, 361 N.W.2d at 684-85.

Hulsey, 142 Wis. 2d at 644-46, 419 N.W.2d at 290-91 (citations and emphasis in original, footnotes omitted). Following the reasoning set forth in Hulsey, the single limit provision as set forth in this case does not prevent the stacking of UM coverage of the noninvolved vehicles.

In conclusion, the children, Evans and Carrington, are the equivalent of "wards or foster children" and meet the definition of protected persons under St. Paul's policy. Hence, they are named insureds and entitled to coverage of the listed but noninvolved vehicles. Further, the single limit provision contained in the policy violates sec. 631.43(1), Stats. This provision of the policy cannot limit the coverage for each accident to a total of $100,000 for the entire fleet.

By the Court. — Judgment reversed.

1 This court's request for certification was denied by the supreme court on April 9, 1991.

2 See sec. 48.13(10), Stats.

3 St. Paul paid $100,000 into court. This was distributed to the two minor residents and Lori Jarrell, who was also injured in the collision. Upon stipulation, the trial court ordered distribution of the fund.

4 The single-limit provision states:

5 Evans' dispositional order placed her at Child & Adolescent Treatment Center and provided that, when released, she be placed at an appropriate treatment center. At the time the first extension petition was filed, Evans resided at Sunburst. Car-rington's extension of the dispositional order extended his placement at Sunburst.

6 Lori Jarrell was an occupancy insured. She did not reside at nor was she employed by Sunburst.

7 Sunburst argues that even if the children are named insureds, the single-limit provision in the policy precludes stacking the coverage.

8 The policy lists each covered vehicle and separately declares the premium rate for each. Coverage for two of the vehicles was omitted in August of 1985; however, coverage reappeared on the policy issued in January of 1986.

9 See sec. 48.34(3) (c), Stats.

10 The description of Sunburst as a group home is not assailed by St. Paul, which in its brief refers to Sunburst as a "youth home."

11 See policy language, supra note 3.

12 Section 632.32(4)(a), Stats., provides in part:

(4) Required Uninsured Motorist and Medical Payments Coverages. Every policy of insurance subject to this section that insures with respect to any motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall contain therein or supplemental thereto provisions approved by the commissioner:

(a) Uninsured motorist. . ..